For the first decade of the 21st century, the industrial wasteland between Berlin’s Ostbahnhof station and the river Spree was earmarked for a huge urban regeneration project – one that would show that the German capital could keep up with London and New York. Where flowing water had once marked the divide between communist and capitalist spheres of influence were to be a phalanx of high-rise blocks made of shiny glass, some of them 80 metres tall, containing luxury apartments, hotels and offices.

But tomorrow, that same 12,000m2 patch of land will open with an altogether different look: an urban village made of recycled windows, secondhand bricks and scrap wood, containing among other things a studio for circus acrobats, a children’s theatre, a cake shop and a nursery where parents can drop off their children while they go clubbing next door. There’s even a landing stage for beavers.

The Holzmarkt development is the result of an unprecedented experiment in a major world capital: what if a city allowed a new quarter to be built not by the highest bidding property developers or the urban planners with the highest accolades, but the nightclub owners who put on the best parties in town?

We wanted to disable the mechanisms of the race-to-the-bottom economy

Juval Dieziger

Juval Dieziger, 42, and Christoph Klenzendorf, 43, used to run Bar25, an institution which started as a silver ‘68 Nagetusch trailer serving up whisky and techno and grew into a nightclub in the style of a Western saloon underneath the old Jannowitzbrücke station.

Along with nearby Berghain, Bar25 was one of the legendary venues that fostered post-millennial Berlin’s status as a party capital. With the site due to be regenerated by holding company SpreeUrban, Bar25 closed its doors with a five-day party in 2010.

But when talks between SpreeUrban and investors collapsed two years later and the plot of land was put out for tender, Dieziger and Klenzendorf spotted an opportunity to reclaim their old stomping ground.

A Swiss pension fund called Abendrot, which had been born out of the anti-nuclear movement, beat off competition from hedge funds and bought the site for over €10m (£8.5m), then leasing it back to a cooperative founded by Bar25 regulars.

Dieziger and his co-conspirators had been part of the protest movement against the original plans on the sunny northern side of the river, which culminated in locals blocking a boat tour for investors with an armada of rubber dinghies. But he felt simply being against gentrification wasn’t enough.

“We were different. We had attitude,” he said, walking across the building site a few days before its grand opening. “If your position is that you are always against everything that is changing in this city, then you’ll eventually get overrun and left behind. You have to learn to use the system to your advantage”.

The aim was create a self-sustaining microcosm: if one of the acrobats injures her back while training in the studio, she can drop off her children at the nursery and visit a chiropractor one floor up. In return, her troupe are required to host all their premiers at the events venue or the KaterHolzig nightclub on the site, thus raising cash that feeds back into the collective system.

The Pampa beach bar at the Holzmarkt site in 2015. Photograph: Christian Jungeblodt for the Guardian

The canteen, which serves a lunch menu for €6 to the approximately 300 people working on the site during the day, doubles up as an upmarket restaurant in the evening, serving expensive wines and a seven-course menu conceived by a Noma-trained chef.

“We wanted to disable the mechanisms of the race-to-the-bottom economy and create as many synergies as possible,” said Dieziger. “We didn’t want to build the kind of market economy where those offering the cheapest products for the cheapest conditions win out. If one of the businesses here struggles, then the others may have to help out.”

Not all of the team’s original vision has survived four years of planning applications. Bread is baked on-site, though a plan to grow the restaurant’s vegetables in allotments by the river Spree fell foul of hygiene regulations. A 24-hour-nursery for parents who worked night shifts turned out to be too complicated to organise; a proposal for 12-floor high-rise buildings made entirely out of wood sent health-and-safety officers into fits.

“It was a learning curve for us: we had to learn to obey the rules we used to ignore”, said Dieziger after over 80 visits to the Berlin building authorities. “If I had known eight years ago how much work this would require, I wouldn’t have done it.”

The Fame restaurant on site features food by a Noma-trained chef. Photograph: Christian Jungeblodt for the Guardian

The project’s ambition, to show that a city can grow up without losing its soul, also required a number of self-inflicted commercial restraints: neither the cooperative nor the Abendrot foundation are contractually allowed to sell the property for their own profit. According to Dieziger, the value of properties in the area has risen ten-fold in the four years since the first cut of the spade.

In the Bar25 days most of the staff lived in self-made shacks and caravans next to the club, but in its reincarnation the site doesn’t contain any permanent housing. Eleven refugees are currently sheltered on the site, and there are plans for temporary student accommodation and a guest house, but none of the people behind the project live on the site.

“If we had decided to live here as well, then everyone would have wanted to live here”, said Dieziger. “So we had to say no. Owning a home can make people very selfish.”

In contrast to Berghain, housed in an austere former power plant, Bar25 used to pride itself on its openness. Door policy was as strict and unfathomable as anywhere in Berlin clubland, but parties at Dieziger and Klenzendorf’s venue, which opened only during the summer months, took place as much outside as indoors. “Less testosterone and more love,” was the owners’ motto.

In a village with four entrances and no gates, that attitude could pose a potential problem. The nearby RAW complex – another jumble of derelict buildings turned creative hub and party mile – has in recent years begun to draw stag-dos and tourists, who in turn have attracted drug dealers and pickpockets.

Holzmarkt’s management are not planning advertise or market the development in a conventional way – word of mouth, they hope, will act as a natural filter for the kind of people their experiment attracts. The village’s layout may also act as a natural barrier to it being overrun: without a central thoroughfare and only a meandering cycling path along the river, it’s the kind of place you can amble around but not race through.

The challenge in the first few months will be whether Holzmarkt can recreate the Bar25 experience without bringing in a bouncer or some sort of village police. If their experiment succeeds, they could achieve something that Berlin under the old SpreeUrban plans would have never even imagined: not to catch up with London and New York, but to build a new model for other major cities to follow.

“Everyone is welcome, but of course we hope that people show some respect,” said Dieziger. Over the years, even Berlin’s veteran hedonists have learned to appreciate that excess is defined by limits. The people living in the apartments across the river from their club had his personal mobile number, he said. That way they didn’t have to call the police when the music got too loud.

This article titled “The party city grows up: how Berlin’s clubbers built their own urban village” was written by Philip Oltermann in Berlin, for The Guardian on Sunday 30th April 2017 11.00 UTC

For the first decade of the 21st century, the industrial wasteland between Berlin’s Ostbahnhof station and the river Spree was earmarked for a huge urban regeneration project – one that would show that the German capital could keep up with London and New York. Where flowing water had once marked the divide between communist and capitalist spheres of influence were to be a phalanx of high-rise blocks made of shiny glass, some of them 80 metres tall, containing luxury apartments, hotels and offices.

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